New Delhi, Oct 7 (SocialNews.XYZ) The Reserve Bank of India on Wednesday projected consumer price inflation at 5.2 per cent for FY27, saying price pressures were no longer as benign as they were last year, citing higher food and energy prices and supply-side risks.
The RBI with inflation seen at 4.9 per cent in the second quarter, 6 per cent in the third quarter and 5.7 per cent in the fourth quarter.
In addition, inflation was projected at 5.6 per cent for the first quarter of 2027-28, while core inflation was seen at 4.4 per cent for 2026-27.
The RBI Governor Sanjay Malhotra has highlighted that CPI inflation rose to 4.8 per cent in August from 4.5 per cent in July with the increase mainly driven by higher food and fuel inflation.
"Core inflation has also picked up indicating some signs of widening price pressures," Malhotra said in his statement.
Food price increases have become more broad-based with notable spikes in items such as sugar and onion, while the rise in fuel inflation in August largely reflected unfavourable base effects, the RBI said.
Core inflation rose to 4.2 per cent in August, while core inflation excluding precious metals increased to 2.9 per cent, according to the RBI Governor.
Moreover, the cetnral bank said supply-side pressures could persist due to a deficient monsoon, ongoing El Nino conditions and elevated energy and other commodity prices, with the pass-through of these costs continuing.
The weighted share of items in the headline CPI basket recording inflation above 4% also increased steadily to about 37% in August, it said.
"Inflation and its outlook are not benign as they were last year," Malhotra said, adding that headline CPI inflation was expected to average almost 5.8 per cent over the next three quarters and core inflation was projected at 4.4 per cent this year.
"In this milieu, recalibrating the policy rate is imperative," Malhotra added.
Source: IANS
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